Investor interest in the ongoing initial public offerings (IPOs) shows no signs of slowing down with both Tata Tech and the Indian Renewable Energy Development Agency (IREDA) recording massive subscriptions.
IREDA closed its IPO with a massive 38.8x subscription, buoyed by 104.57x booking in the qualified institutional buyers (QIB) space. The last instance of an IPO seeing higher QIB booking was in 2019 when the Indian Railway Catering and Tourism Corporation (IRCTC) QIB segment recorded bids of 105.55x.
“The QIB interest rates are due to the high inflow of SIP funds, which has left the institutions with a surplus. Therefore, institutional subscription has been encouraging as they see a lot of value in these public issues,” said Rajendra Naik, managing director (investment banking), Centrum Capital.
The non-institutional and retail sectors received bids of 24.16x and 7.73x. The price band for the Rs 2,150.21 crore offer has been fixed at Rs 30-32 per share.
Tata Technologies – the other major IPO – was booked at 14.85 times on Thursday, the second day of subscription. While the QIB and retail portion saw bids of 8.55x and 11.2x, the HNI or non-institutional portion was booked at 31x. For the Rs 3,042-crore IPO, which closes on Friday, the price range is Rs 475-500 per share.
Among the smaller IPOs, both Gandhar Oil and Flair were fully subscribed on the second day of the issue, while Fedbank was the only one not to record a full subscription.
The Rs 500-crore Gandhar IPO recorded a strong 15.25x booking thanks to 26.3x HNI booking, while the QIB and retail segments recorded 3.14x and 17.24x bookings respectively . Flair, on the other hand, was subscribed at 6.11x with significant interest from HNIs (10x). The QIB and retail shares recorded 1.36x and 7.14x bookings respectively.
“The general market sentiment is positive and IPOs leave a lot open for investors. It is an attractive avenue for HNI investments as it leaves the door open for daily gains on listing,” Naik added.
Fedbank’s public offering remained a muted issue and failed to generate any enthusiasm among investors. The issue was subscribed at just 0.9 times, with only a few takers in the QIB and HNI shares. Only in the retail segment was there a full subscription of 1.25x.
A banker, who did not want to be named, said the Fed has seen a muted response given the impact of recent regulatory changes. However, it is likely to perform well post-listing, he added.
Market participants were recently of the opinion that the market was ripe for IPOs and that the overall mood was good. This is because the companies that have been listed recently have generally performed well and met expectations.
Furthermore, the rally in mid- and small-cap indices for most of the year has not only boosted market sentiment but also boosted the confidence of retail investors.
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